Editor’s Note: In response to the following letter from Governor Peter Shumlin to local school board members, Warren School Board member and state Representative Adam Greshin responded. Greshin’s letter appears below.

November 26, 2012

Dear local education leader,

Thank you for devoting your time and energy to providing quality educational opportunities for Vermont students. Overall, our schools perform very well. We have a lot to be proud of. At the same time, we must redouble efforts to constrain, if not reduce, education spending. By all accounts, our spending levels are among the highest in the nation. Along with changes in the statewide grand list, local spending is the driving factor in whether and how much education property tax rates rise or fall.

Recognizing that you and your colleagues are in the process of developing a budget for the next school year, I have asked the Department of Education to provide you with a printout displaying a number of spending indicators by school district that may be helpful in that process. The printout allows you to compare your school to others in your region and around the state. I realize the data provided may not be perfect, but it is my hope that the information will stimulate questions and answers, helping you to develop the most cost-conscious budget possible.

Right now, it appears that statutory requirements, and an early estimate that school spending on a statewide basis will increase by 4.8% next year, dictate that the statewide property tax rate will rise 3 to 5 cents next year. If you all can hold school spending to the rate of inflation, the increase will be less. I understand that situations vary by district and support local decision making by school boards and voters but acknowledge that we are looking at the 15th consecutive year of declining enrollments. The number of equalized pupils is projected to decline by over 650 next year. We must ensure our children have access to first-class educational opportunities in a manner that is affordable for our citizens.

The indicators included in the printout were compiled using existing reports found on the Department of Education’s website. If you have questions about the data or suggestions for other indicators that should be included in the future, please feel free to share them with your contacts at VT DOE.

Keep up the great work.

Sincerely,

Peter Shumlin

Governor

Dear Governor Shumlin:

I just received your second annual plea to “local education leaders” to put the brakes on school spending. I wait with foreboding for the Department of Taxes’ first pass at 2013-14 education tax rates due next week. (The Department of Taxes report, released over the weekend, called for a 5 cent hike in the base education tax rate.)

Most school districts are locked into contracts that raise teachers’ salaries between 3 to 4 percent annually. That doesn’t include step increases. Staff and administrative salaries typically follow the lead of the teachers. With almost 60 percent of the average school budget going to salaries, most budgets will rise at least 2 percent annually all else being equal. I would suggest you call your friends at the Vermont NEA, all of whom heartily endorsed and supported your candidacy, and ask them for the same temperance that you have requested from school boards.

Another 20 percent of the average school budget pays for employee benefits. You are no doubt aware VEHI, the health insurance association covering most school employees, has asked for a 12.8 percent rate hike for next year. That request will have to pass through your Department of Financial Regulation but, assuming they get a 10 percent increase, that’s another 10 percent on 20 percent of the school budget. You can see the math is pretty severe. And before you use this to justify health care reform, I would remind you VEHI has pointed to both state and federal health care reform to help justify their rate increase. Is the idea to coax school boards to scrap VEHI, pocket the overhead savings and ask school employees to join the rest of us in the exchange? Think of all the federal dollars that would pull down!

The Department of Education data you circulated was helpful for budgeting, but it was also interesting for other reasons. Did I count 63 supervisory unions and districts for 85,500 pupils? Some of these administrative units have only a few hundred kids! Even the larger unions have fewer kids than an average suburban high school. Unfortunately, the budgets for the supervisory unions and districts weren’t included in the data. We have no way of knowing the trend in spending for these administrative units although I’m quite sure the trend is not our friend. Last legislative biennium you signed two education consolidation bills that offered tax incentives to unions and districts to consolidate. I think one union took the bait. At least we’re making progress …. How about asking your new education secretary to come up with a plan to reduce administrative expenses in statewide education?

Perhaps most concerning, though, is the certain hike in education taxes regardless of what my district decides. Your letter says “local spending is the driving factor in whether and how much education property tax rates rise or fall.” I would say local spending is one factor, not the driving factor. Courtesy of Act 60, there’s also statewide spending which in this case appears to be doing most of the driving. Then there’s the base education rate which you and the Legislature are free to move around. And let’s not forget the General Fund transfer. Why bother carrying out staff and program reductions if education taxes will rise anyway? Telling voters their taxes are going up, but they would have gone up more if tough decisions weren’t made, doesn’t cut it with most school boards. If you’re going to take a pounding, you might as well get it all out of the way at once. It helps if we can blame it on the system which in this case is entirely justified.

The rising Grand List tidal wave masked the structural deficiencies of our education finance system and facilitated an orgy of statewide school spending. Now that the wave has crashed, we’re left with a bloated education bureaucracy fighting over a dwindling pool of students, all the while assuming life can go on as before if only school boards would toughen up and make the right decisions. School boards are, in fact, making logical decisions. They are taking what they can get from one large pool of (other people’s) money. Economists call that the “tragedy of the commons,” and it never ends well.

You have demonstrated during your tenure an admirable desire to take on big issues. You took on health care reform because you knew our current health care system was structurally deficient and financially unsustainable. You deserve credit for forcing me and many other decision makers to face up to this fact. I think you could do the same thing for our education system. Growth in education spending in Vermont has, in fact, outpaced growth in health care spending over the past decade. This too is unsustainable and it can’t be fixed by admonishing school boards to toe the line. Board members are volunteers with lives to lead and children to educate. They work within the system they are given. The fix requires leadership and risk, both of which you’ve been happy to take on during your first term. Please give it a shot.